Design flaws cost developer $1.5 million

The U.S. Department of Justice planned to announce today that it has reached a $1.5 million settlement with one of the largest apartment developers in Spokane and his architect for alleged violations of the Fair Housing Act and the Americans with Disabilities Act.

An investigation initiated in 2002 by the Northwest Fair Housing Alliance, then passed on to the Justice Department, resulted in the settlement with developer Richard Naccarato, his company, Cedar Builders, and architect Glen Cloninger.

The investigation revealed alleged design and construction flaws that limit accessibility in a variety of ways for people with disabilities, the settlement says. The design flaws are as small as closet rods that are too high and as large as a lack of paved walkways, said Fred Rivera, an attorney representing Naccarato. The developer has an ownership interest in 16 apartment complexes in the Spokane area, but the settlement affected just first-floor units in 10 of them.

“We are pleased they have decided to cooperate and remedy the flaws in their design and that they are going to provide leadership and an example for other developers to follow suit,” said Marley Eichstaedt, executive director of the housing alliance.

“I recognize that all builders have an obligation to be fully informed and to respond to all the requirements of these laws,” Naccarato said in a prepared statement. “I also recognize and am proud of the fact that I am setting an example for other builders who like me, may not be as fully compliant as they should be.”

Justice Department officials refused to comment on the settlement in advance of its filing. A draft copy of the settlement was obtained by The Spokesman-Review.

The settlement calls for Cedar Builders to pay for more than $1 million worth of retrofits to 666 first-floor apartments at the 10 complexes. While admitting no wrongdoing, the defendants agreed to cooperate with the settlement terms.

The settlement also calls for the defendants, including Naccarato, Cedar Builders and Cloninger, to collectively place $450,000 in an account to compensate people who come forward with claims for damages. In addition, the defendants will pay the Justice Department a civil penalty of $25,000 and $25,000 each to the housing alliance, and to Jason Sdao, a disabled man who lived in one of the units at 1110 E. Cozza Drive, the settlements says. How those payments will be divided among the defendants is confidential, Rivera said.

Sdao was a single parent in a wheelchair caring for two young children when he lived at Cedar Springs Estates II, said his attorney, Breean Beggs. Sdao had to use his apartment’s back door because the front door didn’t have a ramp. He couldn’t turn around in his kitchen, and he had difficulty bathing his children because he couldn’t maneuver effectively in the bathroom, Beggs said. Sdao has since moved out of the apartment complex.

However, Sdao’s experience did not give rise to the case. The alleged violations were discovered through routine investigations conducted by the fair housing alliance, Eichstaedt said. Sdao joined the case after it started, Beggs said.

Naccarato also will spend $15,000 to set up seminars to help other builders, architects and developers understand the requirements of the Fair Housing Act. The first of the seminars took place Tuesday, with about 50 attendees, Rivera said. Another is scheduled for Nov. 10.

The majority of the retrofits will take place by December 2007, Rivera said.

Eichstaedt said in a news release that Cedar Builders is not alone in its lack of compliance with the act, which has been in effect for 10 years.

“Unfortunately, many architects, builders and local officials in the region are still unaware of the Fair Housing Act’s design and construction provisions even 10 years after they were enacted,” she said.

In addition, Rivera said in a news release that the building plans were signed off on by the “appropriate local entities” who provided the required permits.

Rivera said retrofits will be done in two ways. Some will be done automatically; others will be done upon tenant requests. Some will take a few minutes; others may take up to eight hours, he said. The settlement calls for Cedar Builders to cover lodging costs if tenants are displaced during the work. In addition, it says the developer may not charge tenants any additional rent or fees to cover the work.

This is the second settlement between Naccarato and the Justice Department within the past 10 years, news reports show. In March 1996, Naccarato settled with the Justice Department for $76,000 in a case that the U.S. attorney in Spokane at the time called the biggest housing discrimination settlement in state history. Citing safety concerns, Naccarato had a policy of not renting upper-floor apartments to people with children, a violation of the act, news reports said.

However, Rivera said the government had the option of treating this as a second offense and levying up to $110,000 in civil penalties, which it did not do.